Death, vanity and a fake Gucci purse

Few things can focus one's mind on mortality like airplane turbulence. Bouncing around 35,000 feet over the Pacific Ocean, one can't help but think of plunging into the frigid Bering Sea. And so, I blog to distract.

After a visit to East Asia, it's hard not to ponder the impact the fakes market has on designer goods and brands. As I boarded this flight from Shanghai to Chicago, a parade of roller-duffels emblazoned with grand initials (lots of LV's, interlocking G's, bold C's) were stuffed into economy class overhead compartments.

From the Temple Street Night Market in Hong Kong to the Silk Market in Beijing and JJ Market in Bangkok – pirated luxury goods are big business. By some estimates, counterfeit products account for 7% of worldwide trade. Even though imitation is the highest form of flattery, producers of the genuine articles are none too pleased by the rip-offs. Just yesterday, Polo and VF's North Face filed a federal lawsuit against over 130 producers of counterfeit goods.

American and European brands have been crying foul on violating trade dress rules for eons. There are several common arguments made about the fakes market:  

• Intellectual Property rights are important - Thomas Jefferson asserted that protection of IP was one of the underpinnings of a free society. Protecting ideas is vital for stimulating creation of more new ideas. Growing up in Silicon Valley, I believe this… but much of Asia just doesn't share this view. Some counterfeit producers make an argument that IP should apply only to more developed economies; Western manufacturers are probably fighting a losing battle to convince them otherwise.
• Counterfeits divert demand from genuine goods – There's a growing body of evidence out there that this is actually dead wrong. In fact, according to a recent article out of MIT Sloan, purchase of fake goods stimulates demand for genuine luxury bands. Fakes customers either find themselves unsatisfied with owning a counterfeit or use purchase as a trial of owning the real thing.  
• Fakes manufacturers use unfair labor practices – While this is probably true in some instances, this is a sweeping assumption that probably doesn't apply to most producers. Because of the scurrilous nature of counterfeit manufacturing, it's difficult to trace practices if you don't know who is producing which goods.

This inability to trace and account for labor practices in the fakes market – indeed for most low-price manufacturers – gives me pause at purchasing fakes at the markets… but this is mostly a disingenuous concern. I've probably purchased plenty of goods that have been produced with questionable labor practices without thinking twice.

The primary reason I shy away from purchasing fakes is twofold: craftsmanship and vanity. For me, what makes a good special and worth the expense is a mastery of craft; fake goods are almost always mass manufactured and display poor quality. I also shouldn't sell short my own vanity and the modest pleasure derived from knowing I'm wearing a genuine article or brand.

To better understand more about why the market for fake goods is so large and how to craft successful anti-pirating marketing, MIT Sloan conducted a study of purchase behavior in five major markets: Brazil, Russia, India, China and the United States.